Starting in April, Nippon Export and Investment Insurance (NEXI) will offer export insurance that fully covers losses suffered by companies involved in projects to develop railways, ports, and other infrastructure in developing countries. In the event that a company cannot recover payment due to such factors as war or remittance limits in the country of the infrastructure project, NEXI will supply the payment instead. The government has designated infrastructure exports as a key part of its growth strategy, and this trade insurance will support that objective.
The current ceiling on NEXI export insurance coverage is 97.5%. Many railway and port improvement projects, for example, are large scale, however, and there is a chance that a company could suffer a major loss in the event of an emergency in the country of the project. Raising the coverage rate will make it easier for companies to enter developing countries and emerging economies where there is a high risk of nonpayment.